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https://www.bitjustice.org/Discussion/forumid/4/threadid/10/scope/postsCommon Misguided Arguments against Tainting or Blacklisting1. It will ruin Bitcoin's fungibilityThis flawed argument is largely based on the assumption that bitcoins are or should be as fungible as paper currencies. This is ignorant of the fact that bitcoins do not exist on their own right; rather they are simply properties or byproducts of the transactions recorded on the Blockchain - often referred to as the public ledger that does automatically and permanently record every single transaction with a unique ID. Paper currencies are inherently fungible since there is no automatic recording associated with each transaction as there is on the Bitcoin network. With or without blacklisting the transaction patterns and coin trails on the Blockchain can only be blurred through explicit effort such as laundering, mixing or excessive address hopping etc. Tainting or blacklisting is a reporting measure on a small sample of (stolen) funds, not a method for broad tracking. Reporting the serial numbers of stolen USD on websites would not be regarded as harming the fungibility of the dollar so why is the fear of blacklisting stolen bitcoins? Must be due to the fact that Bitcoin transactions are already chain tracked on the Blockchian thus making the currency much less anonymous as many had mistakenly believed before. Nonetheless, those using fungibility as an argument against tainting or blacklisting don't seem to be that much different than those who attempted to steal the bell while holding their own ears.
2. Somehow it will lead to more centralized authorities or controlWithout an effective means of enforcement, any blacklist, whitelist or redlist is pointless one way or the other. This is exactly what happened to the tainting (tagging) attempt tried before. Any meaningful enforcement on the Bitcoin network will inevitably require the buy-ins from at least the majority of the network's participants. A blacklist published or approved by a central authority will unquestionably fail to gain such buy-ins. In other words, if enough people questioning the fairness or transparency of the listing process they will simply refuse to join force the enforcement technically, which will in turn doom the whole effort naturally. An opt-in blacklisting process could actually install long-term decision-making power within the people of the community. On the contrary, the concerted, flat dismissal of its potentials spells a word closer to authoritarian.
3. Illicit coins ill-begotten by innocent hands too will be frozenThe flaw in this argument (along with the misquote of a 1700s' Scottish monetary case) is to assume that a blacklist is to be used to invalidate coins when in fact it can only be used to aid in the potential reversal of some illicit transactions. Blacklisting an address known to be belonging to a perpetrator will in no way affect the coins sitting in a different address, however it does serve as a public alert before the innocent party receives the coins. Using the Scottish case as an analogy, blacklisting does not equate to saying the notes that the bank unknowingly received is invalid but rather can be seen as a simple public statement that a specific note had been stolen, thus all parties, especially banks need to be well aware when receiving notes.
4. This will be a futile effortCoin tainting or blacklisting without speedy fund freeze certainly is a futile effort. Should we thus simply abandon the whole idea as an anti-theft strategy then? Should the public pursuit it the effort is deemed to be daunting. However, one outcome is already quite certain - it will never work if nobody believes in it.
